Zuma link in nephew's Korean deal

President Jacob Zuma met the boss of a South Korean shipping multinational before the Korean signed a major deal with Zuma’s nephew on Monday, the Mail & Guardian can reveal.

As deputy president, Zuma was found to have furthered the business interests of his former financial adviser, Schabir Shaik. The latest meeting suggests that as president he is lending himself to advance the business interests of a relative.

A spokesperson for Daewoo Shipbuilding and Marine Engineering confirmed on Thursday that his company’s chief executive, Nam Sang-Tae, met President Zuma in Pretoria shortly before Nam signed the shipping deal with Khulubuse Zuma’s Impinda Group.

A picture obtained by the M&G shows President Zuma, casual in a tracksuit top, clasping Nam’s hand.
The picture appears to have been taken on Sunday, the day before the Daewoo-Impinda deal was clinched.

Khulubuse, a former taxi operator and son of President Zuma’s brother, Michael, has made rapid strides in business since his uncle took power. His first major venture was the troubled takeover last year of liquidated Pamodzi Gold’s mines through Aurora Empowerment Systems, which he chairs.

Democratic Republic of Congo President Joseph Kabila awarded Khulubuse Zuma two heavily contested oil exploration blocks on Lake Albert last month. The contracts are controversial because Khulubuse has no background in the oil business and the exploration rights were taken from Irish multinational Tullow Oil and South Africa’s Sacoil, which were originally granted them.

The Daewoo spokesperson, who asked not to be named, said Daewoo’s tie-up with Impinda replicated a joint shipping venture it had with the Nigerian state oil company. Asked whether President Zuma had introduced his nephew’s company to them, he initially said: “Yes, that’s right,” but later said he was not sure.

The deal, for which a memorandum of understanding was signed on Monday, involves Daewoo acquiring 49% of Impinda Group’s transport arm, which would be grown as a commodity, oil and gas shipper. Daewoo has reportedly said that Impinda is already in talks with three mining companies to transport raw material.

President Zuma’s latest move echoes his relationship with Shaik, who used meetings with Zuma to show business partners his “political connectivity”. Evidence of such meetings emerged during Shaik’s corruption trial in 2004 and 2005 and underpinned the court’s finding of a “mutually beneficial symbiosis” between Shaik and Zuma.

On Thursday Khulubuse Zuma denied there was any “such thing as political connectivity in this deal”.

He said the president “doesn’t know the Daewoo people” and met Daewoo boss Nam for “only about three minutes” so that the Koreans could hand over a gift. “Use common sense: Do you think the president has the skill to facilitate such a deal in three minutes?”

Asked whether a meeting with the president, followed by the signing of a deal with a relative of the president, would not raise questions, he said: “Questions by who? Who am I accountable to? I am accountable to my own future and the future of my children. You are confusing the issue of the meeting with the issue of the deal: they are not connected.”

The president, he said, was not present at the signing of the memorandum of understanding.

Asked what Daewoo was buying into Impinda’s transport division, he was vague: “It’s a transportation company. I started out in taxis, then I bought trucks. Now I also have buses.”

Asked why—other than because of his political connections—a multinational company would want to buy a 49% share in an unknown transport company, Khulubuse said: “Because I have a vision.” He also said he had already secured some shipping contracts, but could not disclose the details yet. “I’m going to do another deal with them in another African country in the near future.”

The Daewoo group, which suffered a massive collapse and restructuring in the last decade, has diversified into the energy business. In 2007 two executives of a Daewoo company were convicted of breaking an arms export ban to Burma. The company had helped set up a weapons factory for the Burmese military junta, which helped Daewoo secure the rights to a massive new Burmese gas field.

Khulubuse referred questions about why the president met Nam to Zuma’s office. Questions sent to Zuma’s spokesperson, Zizi Kodwa, were unanswered at the time of going to press.

This article was co-produced by amaBhungane, investigators of the M&G Centre for Investigative Journalism, a nonprofit initiative to enhance capacity for investigative journalism in the public interest. www.amabhungane.co.za.

Stefaans Brümmer

Stefaans is an old hand at investigations. A politics and journalism graduate, he cut his reporting teeth at the Cape Argus in the tumultuous early 1990s; then joined the Mail & Guardian as democracy dawned in April 1994.
For the next 16 years (a late-1990s diversion into television and freelancing apart), the M&G was his journalistic home and launch pad for award-winning investigations focusing on the nexus between politics and money.
Stefaans has co-authored exposés including Oilgate, the Selebi affair, Chancellor House and significant breaks in the arms deal scandal.
Stefaans and Sam Sole co-founded amaBhungane in 2010. He divides his time between the demands of media bureaucracy (which he detests), coaching members of the amaBhungane team, and his first love, digging for dung.